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THREAD The head of Hong Kong’s de facto central bank just put out answers to some "frequent" questions—obvs related to concerns over the draconian natsec law Beijing imposed last year. Let’s break down what each of these Q+As really tells us. Link: https://www.hkma.gov.hk/eng/news-and-media/insight/2021/02/20210208/ 1/8
“Is capital fleeing Hong Kong?” Obviously not on the whole, bc funds are flowing into HK to chase Chinese tech IPOs & boosting the HK dollar: https://www.ft.com/content/05686da9-60f8-4a3a-a5c5-95155bd01ffe But a strong HKD doesn’t mean HKers aren't moving elsewhere w/their money—or aren’t planning to post-covid. 2/8
“[HKers' money &] Private wealth is leaving Hong Kong?” This one dodges the real issue (retail money) to talk about private wealth management. Also admits there aren’t offshore acct data available for 2020 yet. Again, many HKers expected to leave asap: https://www.ft.com/content/7eed5303-5937-4245-89d8-1c86a65fac3e 3/8
![“[HKers' money &] Private wealth is leaving Hong Kong?” This one dodges the real issue (retail money) to talk about private wealth management. Also admits there aren’t offshore acct data available for 2020 yet. Again, many HKers expected to leave asap: https://www.ft.com/content/7eed5303-5937-4245-89d8-1c86a65fac3e 3/8](https://pbs.twimg.com/media/EtsfxclUUAYMgZY.jpg "“[HKers' money &] Private wealth is leaving Hong Kong?” This one dodges the real issue (retail money) to talk about private wealth management. Also admits there aren’t offshore acct data available for 2020 yet. Again, many HKers expected to leave asap: https://www.ft.com/content/7eed5303-5937-4245-89d8-1c86a65fac3e 3/8")
“Financial institutions are…leaving Hong Kong in droves?” Nobody said they were—it would be difficult in the middle of a pandemic! But there are clear signs global biz has doubts about HK's safe harbor status, as its government has obviously noticed: https://www.ft.com/content/76f88fc4-a0c2-42dd-8419-5956477c4a4a 4/8
“Has Hong Kong’s capital market been receding?” Weird, badly phrased question, but obviously no—mostly thanks to investment flows from mainland China into HK and flows from intl investors into mostly mainland Chinese markets (but not into HK itself): https://www.ft.com/content/bd4c98de-b507-49de-86b4-7930d8de1b9f 5/8
“Has there been any exodus of talents occurring in Hong Kong?” This conflates limited biz growth in finance/insurance w/real human capital. In reality the number of financial licensees fell in 2020 for the first time since 2013. The FT saw it coming: https://www.ft.com/content/abbbfcec-736c-47ba-b106-b1bdafebd099 6/8
In short, the HKMA answers all the Qs it poses to itself—but they’re not the Qs you’d ask if you really wanted to understand what's happening in HK or how the natsec law has already affected the city's role in global finance. Bonus example: https://www.ft.com/content/1070440a-0993-4c19-9797-2c0e781fd7db 7/8
If you want a more comprehensive, critical read on the future of Hong Kong+Asian finance, stick with the @FinancialTimes and our ace HK+Asia finance corros, including @Tabby_Kinder @primroseriordan @nicolle_liu @alicemuwu @mjruehl and @Urbandirt 8/8
